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At a time when traditional lending by Spanish banks has fallen to levels last seen in 2006, Bankinter SA has teamed up with Magnetar Capital Partners LP in a bid to pioneer what it expects to be rapid growth of alternative financing in the country.
Under the deal, one of Spain's most prudent banks and the hedge fund known for helping to pack collateralized debt obligations with subprime debt and then betting against them are setting up a vehicle to provide up to [euro]200 million in loans to companies which would often otherwise struggle to get funding as banks delever.
The co-financing agreement is only a first step for Bankinter, which wants in a second stage to act as a conduit to link investors, many of whom are flush with cash thanks to central banks' easy money policies, with promising Spanish companies requiring loans.
"We're convinced that this market is going to grow and we want to position ourselves as the lead institution," Borja Uriarte, director of investment banking for Bankinter, told SNL Financial. "Bankinter has realized that there is enormous interest from investors outside Spain in Spanish companies."
Traditionally, banks have provided more than 80% of financing to Spanish companies, leaving little room for shadow banking, which exceeds bank credit in size in some countries, Uriarte said. But total bank lending has declined 12% over...